Fonterra dangles environmental incentive
Fonterra farmers will receive rewards for better care of the environment and their animals but laggards will be punished.
From July next year, they will also be able to fix the price of a percentage of their milk in a hedging scheme with the co-op.
A spokeswoman said it was too soon to give any details of the rewards and demerits scheme, which would not be introduced until the 2019-2020 season. Recently Synlait said it would pay its farmers a premium milk price if they stopped using palm kernel.
The co-op was still consulting with farmers over the scheme, which would focus on milk quality, animal welfare and environmental best practice. It could include mitigation measures to reduce greenhouse gas emissions.
Farm Source and global operations chief operating officer Robert Spurway said the co-op would target support to farmers who wanted to make improvements.
‘‘To help make it simpler for farmers to meet ever increasing expectations on farm, the co-op will bring together existing milk quality, animal welfare and environmental activities into a single, simpler framework, giving them greater clarity about what they need to do to supply Fonterra today and in the future.
‘‘Fonterra will also set out a clearer and more consistent approach on how to manage situations where minimum standards are not being met, helping to protect the reputation of the vast majority of farmers, the co-operative and the wider dairy industry,’’ Spurway said.
The minority of farmers who did not meet minimum standards would be subject to demerits and ‘‘other measures’’ which were not specified in the announcement.